Fannie Mae, Freddie Mac Reportedly Near Deal to Ease Credit

The Associated PressMortgage giants Fannie Mae and Freddie Mac reportedly are close to an agreement to loosen lending rules.By Avik Das

Government-controlled mortgage companies Fannie Mae and Freddie Mac, are close to an agreement with their regulator and lenders that could expand mortgage credit while helping lenders protect themselves from charges of making bad loans, The Wall Street Journalreported.

Fannie Mae and Freddie Mac have recouped tens of billions of dollars in penalties from lenders in recent years over claims that the lenders made underwriting mistakes on loans they sold to the mortgage giants. Lenders have blamed those penalties for tight credit conditions and for prompting them to make loans only to borrowers with near-pristine credit.

If the agreement is completed, lenders may be more willing to lend to borrowers with lower credit scores and smaller down payments, the Journal reported, citing people familiar with the matter. Personnel at Fannie Mae and Freddie Mac were not immediately available for comment.